4 THINGS TO CONSIDER BEFORE RAISING FROM RETAIL INVESTORS

With the growth of the venture market, private/retail investors have entered, investing through various investment platforms. However, these investors differ in their behaviour and decision-making from professional market participants.

Competing with Public Markets:
Retail investors have numerous public market opportunities due to fintech advancements, making it harder for startups to attract them. Founders must be highly persuasive to stand out.

Limited Investment Tools:
Platforms like Republic and Wefunder host high-risk investments, and venture capital trusts are mainly in the UK. Tokenization is a new option, allowing shares to be digitized and offered as tokens.

Regulatory and Narrative Considerations:
Regulatory Limitations: Retail investors face protective legislation, and crowdfunding is capped at $5 million, unsuitable for late-stage startups.

Narrative Appeal:
Retail investors value compelling stories. Founders should appeal to their emotions and values, especially targeting Generation Z.